AMD Rallies Ahead of Earnings Report

Advanced Micro Devices, Inc. (NASDAQ: AMD) rose a convincing 3.7% last week and is up around 15% on the month as the market braces for a quarterly earnings report at the end of the month. This round of earnings could be different: seasonal strength and a product refresh ahead may give investors much optimism to hold the stock.

This quarter will reflect the seasonal strength for the PC, notebook, and gaming market space. Thanks to Black Friday, Cyber Monday, and the holiday season, sales of chips powering PC desktops and notebooks will add positively to AMD stock. Though AMD’s Vega GPU chip is in short supply and is selling above retail, it should still give AMD’s revenue a boost.

AMD launched Ryzen for mobile, a more profitable and important market for the company. The rollout is in the early phases. As more OEMs incorporate Ryzen on notebooks, sales should pick up pace. As AMD takes market share from Intel (NASDAQ: INTC), thanks partly to its poor handling of the security bug, dubbed “Meltdown” and “Spectre,” profit margin will hold steady. Falling component prices will allow AMD to pass the savings to consumers, further driving Ryzen sales higher.